In tandem with steep decline in local equities, the rupee also dropped for the first week of the new year by 31 paise to close at 62.16 against the greenback, breaking two weeks of gaining string.

Fresh dollar demand from importers and lack of any major trigger from overseas markets following new year holidays also weighed on the rupee.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 62.00 a dollar from last weekend's close of 61.85 and moved in a range of 61.74 and 62.56 before settling the week at 62.16, showing a fall of 31 paise or 0.50 pct. In last two week, it had risen by 27 paise or 0.43 pct.

The benchmark S&P BSE Sensex finished the week sharply down by 342.25 points or 1.61 pct on profit booking and caution after the Reserve Bank of India (RBI) Monday said any political instability after next year's general election

would hurt the economy further.

However, Foreign Institutional Investors (FIIs) infused USD 183.73 million on first four days of the week as per Sebi data.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) Pvt Ltd said, "During the last week, the rupee depreciated by half per cent taking cues from local equities which closed down by 1.6 per cent on a weekly basis as lower-than-expected

Services PMI data dented the confidence of investors. This year alarming domestic and global economic concerns depreciated the rupee."

The rupee depreciated over 11 per cent for the year 2013. Immediate resistance for spot USD/INR pair is at 63.00. The trading range for the USD/INR for coming week is expected to be within 62.00 to 64.00, he said.